The hypocrisy or stupidity question is because the Marxist/Progressives are advocating more of the same policies they advocated and implemented in the years leading up to the real estate debacle. Dodd and Frank had pushed unrealistic lending standards for years in their effort to enforce the Marxist principle of share the wealth through the policy outlined by Marx himself. Marx said the government must control and regulate all lending practices and standards. Marxist Dodd and Marxist Frank had for years insisted the banking industry ignore good lending practices by ignoring ability or willingness to repay by the borrower. Dodd and Frank then exasperated this problem by insisting the quasi-governmental agencies support their ill-guided policies by purchasing these toxic loans from the originators. Now the Marxist/Progressives are blaming Timmy G and not themselves for the debacle and it is with them that the fault really lies.
Fast forward to today. The mortgage and housing market are in a downturn. The Marxist/Progressives note nearly half of all mortgages made today go to borrowers with credit scores higher than 750. By way of comparison, in 2001, before Fannie Mae and Freddie Mac purchased the risky loans that damaged their financial health, more than two-thirds of mortgages went to borrowers with scores lower than 750. The Urban Institute estimates that, primarily due to tight or sound credit practices, as many as 1.2 million loans that would have been made in 2001 appear to be “missing” from today’s market.
The Marxist/Progressives further state that the fallout from the housing crisis disproportionately affects first-time home buyers and borrowers of color. Not only were borrowers of color disproportionally targeted by subprime lenders—resulting in massive wealth stripping from which it may take generations to recover—but they are now almost entirely shut out from the conventional mortgage market. Homeownership rates for young people ages 25 to 34 are among the lowest in decades, raising concerns about whether Millennials can build wealth and whether aging Baby Boomers will have buyers to whom they can sell when they are ready to downsize. Of course the Marxist/Progressives are not mentioning that the unemployment within this class is very high due to their misguided economic policies.
In short, unless lenders find a way to extend credit to “qualified” borrowers currently shut out of the housing market, we aren’t likely to see a full housing recovery anytime soon.
What is a qualified buyer? The Marxist/Progressives are insisting a qualified borrower today is the same borrower they said was qualified pre 2009 or a borrower who does not have the ability to repay and/or the willingness to repay. This is much of the Marxist/Progressives voting base. Once again misguided politics override sound policy. Is it hypocrisy or stupidity? I say both.